BOSAD Charts Turkish Paint Industry's Roadmap for the Next 10 Years

Targeting European Leadership through Innovation and Branding

Paint industry products are present everywhere in life… From homes to automobiles, from furniture to electronics, paint industry products are used in many areas. While decorative paints come to mind first when paint is mentioned, there is significant potential in high-value-added industrial paints. Behind the visibly colorful face of the paint industry lies service to key sectors such as construction, infrastructure, transportation, industrial facilities and defence industry. Turkish paint industry, rapidly advancing towards becoming Europe's fourth-largest paint producer, has determined its strategies to achieve its goal of becoming a regional production centre. The Paint Manufacturers Association (BOSAD) has prepared a roadmap that will shape the sector's next 10 years. The report, prepared to guide companies in increasing the competitiveness of Turkish paint industry in light of global trends, reveals that innovation pressure is intensifying. Over the next 10 years, "companies that succeed in innovating" will survive. Another pressure factor will be experienced in scales lagging behind competitors. Turkish paint industry, which has strengthened its position within the basic chemical industry over the past 10 years, was Europe's fifth-largest paint producer in 2015 with production of 915 thousand tonnes, while the sector aims for third place in Europe in the short term. Turkish paint sector, which has 2 percent of the global paint market, holds a market worth approximately 3 billion dollars. Over the past five years, decorative paints recorded 8 percent growth. Decorative paints will continue to be the locomotive of growth in the paint sector.

The Paint Manufacturers Association (BOSAD) has prepared the "Turkey Paint Industry Strategic Development Report" to determine the steps to be taken for Turkish paint industry to maintain its competitive strength in the future and become the region's production base, with increasing competitiveness through production technology and infrastructure.

The report, which details what awaits the sector over the next 10 years, developments at national and international levels, new trends and measures that can be taken to increase competition, was prepared with broad participation of sector experts from both producer and raw material sides, notably the BOSAD Board of Directors, and in collaboration with A.T. Kearney. The Global Trends section of the report, which presents a strategic roadmap to make Turkish Paint Industry a regional attraction centre, contains important clues. While innovation comes to the fore globally, production and consumption figures for environmentally friendly paints are increasing. Another issue closely concerning Turkish paint industry is the increase in company mergers and acquisitions on a global scale. Major players are strengthening their market positions and 'know-how' through acquisitions. Turkish paint industry, which is highly dependent on imports for raw materials at rates reaching 80 percent, competes with Europe in quality and product diversity. Proximity to developing markets with high regional export potential and increasing paint demand creates an important advantage. However, scales in the sector fall behind those of competitors.

The roadmap for the next 10 years presented by BOSAD's Turkey Paint Industry Strategic Development Report points to the need for increased innovation and technology investments.

While companies are recommended to strengthen their corporate operations and financial structures, emphasis is placed on the need for sectoral collaboration in R&D, logistics and procurement. To increase existing export figures, acceleration of the branding process and creation of brands abroad is needed. Digitalisation and customer focus will become more important than ever over the next 10 years. The paint sector will reach consumers directly. BOSAD Board Chairman Ahmet Yiğitbaşı, noting that they have drawn up a strategic roadmap to make Turkish Paint Industry a regional attraction centre, said: "The Turkey Paint Industry Strategic Development Report, which we prepared with the broad participation of our sector experts, particularly our BOSAD Board of Directors, and in collaboration with A.T. Kearney, and on which we have worked for approximately one year, contains important conclusions that will shape our sector's next 10 years. Our paint industry showed significant development over the past 10 years and entered the top five sectors in Europe.

We prepared this work to present Turkey's position, which produces with European quality, in the global paint market where significant changes are taking place, and to create a strategic roadmap that will shape the future of Turkish Paint Industry.

During this period extending to 2026, we sought ways to maintain our competitiveness and determined our strategic priorities. Global paint industry production reached 130 billion dollars. Paint demand is increasing in developing markets and production is shifting accordingly to meet this demand. Turkey is the strongest country in this region in terms of being a production centre and we need to use this advantage well." BOSAD Chairman Ahmet Yiğitbaşı also drew attention to the increased innovation pressure on companies, stating, "New technologies differentiate products and companies. We see that digital trends are changing the rules of the game in the sector and standing out as a differentiating factor. Another pressure factor that will strain Turkish paint industry over the next 10 years is the issue of scales. We will face difficulties competing with current scales in the sector. In the Strategic Roadmap, we recommend that our companies combine their strengths in R&D, logistics and procurement. For major raw material purchases, international strategic partnerships should be established and we say that joint warehouses should be created in export countries requiring strong distribution networks. In particular, to gain strength especially in exports, branding investment needs to increase. Another important issue is the greater use of digital channels in reaching customers with a view to expanding the paint market. Parallel to the global trend, consumer-oriented products will gain importance and in the coming years the paint sector will reach consumers directly," he said.